Highlights:
- Heritage Bank Plc has been unable to improve its financial performance
- The bank also did not have prospects of recovery, leaving CBN with no choice but to revoke its licence
- CBN said it revoked the bank's operating licence to strengthen public confidence in the Nigerian banking system
The Central Bank of Nigeria has revoked the operating licence of Heritage Bank Plc, one of the country's commercial banks.
This announcement was made on Monday, June 3, 2024, via a press release by the apex bank's acting director of Corporate Communications, Hakama Sidi Ali.
According to the statement, the Central Bank was acting in line with its mandate to support a stable financial system in Nigeria and the exercise of its authority under Section 12 (1l) of the Banks and Other Financial Act (BOFIA) 2020.
Why CBN revoked Heritage Bank's licence
The statement read in part,
“Consequently, the CBN has taken this action to strengthen public confidence in the banking system and ensure that the soundness of our financial system is not impaired. We are committed to ensuring the safety and soundness of our financial system, and this action reflects that commitment.
“We wish to assure the public that the Nigerian financial system remains on a solid footing. The action we are taking today reflects our continued commitment to take all necessary steps to ensure the safety and soundness of our financial system,” it added.
The regulator stated that the decision was made in response to the bank's inability to improve its financial performance following the period of engagement with the bank, giving prescribed various supervisory steps intended to stem the decline, but the bank has no reasonable prospects of recovery, making the revocation of the licence the next necessary step.
The CBN said it took this action to strengthen public confidence in the banking system and maintain financial system stability in the country.
What's the fate of Heritage banks' customers?
Despite this, the situation may have significant implications for users, including individual account holders, businesses, and other stakeholders. The capitalisation policy of CBN means that customers' funds are safe and would not be lost with the bank's licence.